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Weekly EURUSD Bulls Want a Second Leg Up

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Market Overview: EURUSD Forex

The weekly EURUSD bulls want a second leg up following the recent pullback to the 20-week EMA. Bulls want a strong breakout above the trading range, followed by a measured move based on its height, targeting the 2018 high. If the market trades higher, bears want the April 17 high, February 10 high, or the bear trend line (drawn across the February 2018 and January 2021 highs) to act as resistance.

EURUSD Forex market

The Weekly EURUSD chart

EURUSD Weekly - Bulls Want 2nd Leg Up, Need FT Buying, Weekly EURUSD Bulls Want a Second Leg Up
  • This week formed a bull doji closing near its high with a prominent tail below.
  • Last week, we said traders would watch whether bears could create bear bars breaking below the 20-week EMA or whether the move would stall around it. A weak, sideways pullback increases the odds of a second leg sideways to up to retest the trading range high.
  • So far, the pullback has remained sideways above the 20-week EMA.
  • Bulls view the past three weeks as a pullback and want the 20-week EMA to act as support, leading to a second leg sideways to up.
  • They want a strong breakout above the trading range, followed by a measured move based on its height, targeting the 2018 high.
  • Bulls see the 48-week trading range as a large bull flag — a 25% pullback from the January 2025 rally — and want trend resumption.
  • They need consecutive bull bars closing near their highs and breaking above the top of the trading range and the bear trend line (drawn across the February 2018 and January 2021 highs) to increase the odds of trend resumption.
  • Bears see the April 17 move as a bull leg within a trading range and a retest of the January 27 high.
  • They want a reversal from a lower high major trend reversal and a head and shoulders top (September 17, January 27, April 17), followed by a retest and breakout below the trading range low.
  • If the market trades higher, bears want the April 17 high, February 10 high, or the bear trend line (drawn across the February 2018 and January 2021 highs) to act as resistance.
  • Bears need consecutive bear bars closing near their lows below the 20-week EMA to demonstrate control.
  • The market tested near the trading range high (April 17) and pulled back to test the middle of the range (around the 20-week EMA) over the past few weeks.
  • The middle of the range is an area of balance and often acts as a magnet.
  • Traders will watch whether bears can create bear bars breaking below the 20-week EMA or whether the move continues to stall around it.
  • If the pullback remains weak and sideways, the odds of a second leg sideways to up to retest the trading range high will increase.
  • For now, the market remains within a trading range with a slight sideways-to-up bias.
  • Price remains within the 48-week range. Until there is a clear breakout with strong follow-through, traders may continue Buy Low, Sell High (BLSH) — buying near the lower third and selling near the upper third of the range.

The Daily EURUSD chart

EURUSD Daily - Bulls Want 2nd Leg, Bears Want Lower High
  • EURUSD traded sideways to up above the 20-day EMA this week.
  • Previously, we said traders were watching whether bulls could create at least a small second leg sideways to up to retest the prior leg high (April 17), or whether bears would generate strong bear bars breaking far below the 20-day EMA.
  • The market has mostly traded sideways above the 20-day EMA over the past three weeks.
  • Bears want a reversal from a double top bear flag (February 23 and April 17) and a lower high major trend reversal.
  • They view the current move as a second leg sideways to up retesting the prior high (April 17), forming a wedge bear flag (April 27, May 1, and May 6) and a smaller lower high major trend reversal.
  • If the market trades higher, bears want the move to be weak, lack follow-through, and consist of overlapping bars with long upper tails.
  • Bears want the April 17 or February 10 highs to act as resistance.
  • Bears need consecutive strong bear bars trading far below the 20-day EMA to demonstrate control.
  • Bulls want a retest of the trading range high, followed by a breakout and trend resumption.
  • Bulls want a measured move based on its height, targeting the 2018 high.
  • They see the entire trading range as a 25% pullback from the January 2025 rally, forming a large double bottom bull flag (August 1 and March 13).
  • Bulls view the current move as a pullback forming a wedge bull flag (April 13, April 30, and May 5) and want the 20-day EMA to act as support.
  • Bulls want a strong second leg sideways to up breaking above the April 17 high to retest the top of the trading range.
  • Bulls need consecutive bull bars closing near their highs to increase the odds of a breakout and trend resumption.
  • If the market trades lower, bulls want the April 30 low to act as support.
  • The market tested near the top of the trading range (April 17), followed by a pullback to the middle of the range (around the 20-day EMA).
  • Traders are watching whether bulls can create a strong second leg sideways to up breaking above the prior leg high (April 17), or whether the move lacks follow-through buying and stalls at a lower high.
  • Or will bears generate strong bear bars breaking far below the 20-day EMA instead?
  • EURUSD remains in a trading range. Until there is a strong breakout with sustained follow-through, traders may continue Buy Low, Sell High (BLSH) — buying near the lower third and selling near the upper third of the range.
  • The middle of the range is an area of balance and often acts as a magnet.
  • For now, the market remains within the trading range, with a slight sideways-to-up bias.

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